In A Competitive World, A Fox Buy Could Sustain Disney's Edge

Walt Disney wants to bulk up its intellectual property by buying some major Fox assets, including its movie/TV production studio, according to a CNBC report.

But is this enough? Not likely.

Media analysts have talked up Disney's need to compete with Netflix -- as well as offering entertainment consumers much more choice.

And that’s the key -- in part. Entertainment consumers want much more choice when signing up for any cable, satellite, telco or new live, linear digital TV network package. This includes video-on-demand, fancy advance TV/time-shifting equipment, and a growing array of different kinds of network/app choices.

Adding more mature media content will help Disney. But so would some international assets. Fox might agree to sell its big Star India network operation -- a massive 650 million-home operation --  as well as its 39% stake in BSkyB.

For Fox, it will get to focus more on its broadcast network, key cable networks -- Fox News Channel and Fox Business -- and regional sports networks.



But Michael Nathanson, senior research analyst for MoffettNathanson Research, has an important question: Why sell off the movie/TV production studio, which has long been a key component for funneling TV programming for all broadcast and many cable networks?

Well, maybe that wouldn’t be set in stone. John Janedis, media analyst at Jefferies, believes that if the deal goes forward, Fox would retain the TV production side of the business.

This has some precedent in the industry: When CBS and Viacom originally went their separate ways, TV production went to CBS; with theatrical movies going to Viacom.

All major TV networks believe content is key to their digital future. It's why Netflix has been ramping up its production efforts -- estimated to spend a massive $8 billion next year, rivaling Disney, Fox and other big traditional TV media companies.

From Fox’s perspective, perhaps it needs to be more nimble in an ever-changing world, where millennial TV and movie consumers move in different directions.

Out-of-the-box media plans that don’t rely on Rupert Murdoch’s longtime media thinking might be needed.

Murdoch's sons -- now in greater control of the company -- might want to use those billions from a possible Disney deal to buy a major social-media site, or a millennial-focused digital video platform.

No matter. Fox and Disney see the industry changing dramatically -- and they are ready to shake things up. 

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